Marriott International Inc sees the Asia Pacific market benefiting from a weaker dollar and expects revenue from China and India to stay strong in the coming years, a top official said on Tuesday.
Marriott, which operates hotels under brands including JW Marriott, Ritz-Carlton and Fairfield Inn, plans to add 85,000 to 100,000 rooms worldwide between 2007 and 2010.
Of these, 30,000 will be outside North America, with more than 11,000 rooms being added in China and India alone.
Our fastest growth is coming from Asia and the Middle East, and we see central and South America also growing, said Geoff Garside, Marriott's executive vice president for Asia Pacific.
And we are not really affected by the weaker dollar -- if anything, more Britons and Europeans are travelling to Asia because their currencies are stronger, he said.
Tighter U.S. credit markets are expected to hurt the development pipeline for some hotels, but Asia was not suffering as a result, Garside said on the sidelines of a conference.
There is enough cash in the region, he said.
Asia-Pacific makes up 35 percent of Marriott's international revenue, and will continue to contribute 35-40 percent, he said.
Marriott, the No. 2 U.S. hotels operator, runs six hotels in India and has 17 more hotels planned, taking its count to 6,000 rooms by 2010. Revenues in India are expected to rise to $150 million in 2007 and to $200 million in 2008, Garside said.
A fast-growing economy and a woefully inadequate supply of hotel rooms have led to strong demand and burgeoning room rates in India, with branded rooms making up less than half an estimated 110,000 rooms in the country.
The Taj Group and the Oberoi group, operated by Indian Hotels Co Ltd and EIH Ltd, dominate the luxury segment, with international firms also entering. More than 100,000 rooms are forecast to be added overall over five years.
In China, where Marriott is adding five properties in Beijing in time for the 2008 Olympics, an increase in supply of rooms may put some pressure on revpar -- or revenue per available room, a key measure of performance -- in the near term, Garside said.
We may see demand taper off a bit in some markets, but it's not going to fall dramatically, he said.
There's so much interest in China, we're not going to have empty hotels on our hands, he said.
Some markets in India, including the cities of Pune, Hyderabad and Chennai, may see a similar situation because several new hotels were being built, he said.
It is a question that we ask constantly: will demand grow as quickly as supply? In some markets it may not, but even if there's a dip, it will only be temporary, Garside said.
The bigger danger was the rising cost of land, which made it harder to conclude deals and delayed development, he said. Marriott has alliances with real estate developers in India including Unitech Ltd, who will own the hotels.
The other danger is that traffic is getting so bad in cities like Shanghai and Mumbai, that guests are not inclined to travel long distances to get to their hotels, he said. (Editing by Ranjit Gangadharan)